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The European Union’s top court has ruled that Malta’s “golden passport” scheme — a cash-for-citizenship programme offering EU passports to wealthy individuals — is illegal under EU law, dealing a major blow to one of the bloc’s most high-profile investor migration schemes, The Guardian reported.
In a landmark judgment delivered Tuesday, the European Court of Justice (ECJ) concluded that the scheme constitutes an unlawful “commercialisation of the grant of the nationality of a member state,” thereby undermining the fundamental principles of EU law. The court added that such schemes jeopardise the mutual trust between EU member states, which is essential for maintaining a borderless Schengen area, the report said.
The court examined Malta’s 2020 investor citizenship programme, under which individuals could obtain Maltese—and, therefore, EU — citizenship by contributing up to €750,000 to the Maltese economy and residing in the country for at least 12 months. However, investigations revealed that many applicants spent minimal time in Malta and still acquired citizenship, the report said, adding that emails shared with the media by the Daphne Caruana Galizia Foundation revealed that many rental properties listed by applicants were uninhabited.
Court Finds Scheme in Breach of EU Law
The ECJ’s ruling follows legal proceedings launched by the European Commission in 2020 against both Malta and Cyprus. While Cyprus shuttered its scheme shortly after the challenge began, Malta chose to defend its position, arguing that nationality laws fall under national jurisdiction.
In a statement following the verdict, Malta’s government reportedly said it was “studying the legal implications so that the regulatory framework on citizenship can then be brought in line with the principles outlined in the judgment.” However, it also defended the programme’s benefits, noting that it had generated more than €1.4 billion in government revenue since 2015, the report said.
Former Maltese Prime Minister Joseph Muscat, who introduced the scheme in 2013, dismissed the ruling as politically motivated. In a Facebook post, he called it “a political judgment.” Muscat resigned in 2020 amid public outcry over his handling of the investigation into the 2017 assassination of investigative journalist Daphne Caruana Galizia — a fierce critic of corruption and the golden passport scheme.
Matthew Caruana Galizia, director of the foundation named after his late mother, called the decision “a win for the people of Malta and for all EU residents who have been unfairly exposed to the whims of money launderers and corrupt criminals buying their way into the EU”, according to The Guardian. He urged the Maltese government “to abolish its citizenship-by-investment programme without delay.”
A European Commission spokesperson welcomed the ruling, reiterating the Commission’s long-standing position: “European citizenship is not for sale,” the publication quoted the spokesperson as saying. “Investor citizenship schemes breach EU law and as such should be abolished by all member states”.
According to the report, the ECJ ruling is expected to have a ripple effect across the continent, especially given several EU countries had launched similar schemes in the aftermath of the global financial crisis, aiming to attract foreign capital. However, the practice has increasingly come under scrutiny over concerns related to corruption, national security and organised crime.
The UK, for instance, scrapped its “tier 1 investor visa” in February 2022, citing risks of illicit finance and deteriorating relations with Russia. Meanwhile, U.S. President Donald Trump announced plans earlier this year to launch a “gold card” visa — a $5 million residency offer for the ultra-wealthy.
